Talking Points:
•After 8 days of congestion at its range extreme, EURUSD finally provided a bearish break
•Risk trends have extended their run and volatility measures further deflated - but confidence isn't robust
•The IMF reminded us of the same issues that spurred recent panics, will Fed speculation in CPI generate more response?
See how retail traders are positioning in the majors using the FXCM SSI readings on DailyFX's sentiment page.
Both the Dollar and risk trends rose this past session, but little was offered to justify the move. While the market certainly doesn't need a reason to make a move, conviction (follow through) generally does need a solid foundation. The US docket offered little to bolster the Greenback's rate forecast support. Perhaps it took its cues from a general appetite for return that would prize its 25bp advantage. Yet, speculative appetite's primary fundamental cue came from the IMF's Global Financial Stability Report. Its assessment was that risks had risen since its October update. China, emerging markets and other laundry list items were regurgitated. Added were reflections on insurance which is a parallel to liquidity concerns. It is thereby very risky to find confidence in the rise from stocks, Yen cross, high yield and other risk-leaning assets. We look at the risks and opportunities that can arise from these conditions in today's Trading Video.
To receive John’s analysis directly via email, please SIGN UP HERE
